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This Annex contains detailed information on tax measures and other legislative initiatives proposed in this document.
Introducing the Ontario Staycation Tax Credit
The government is proposing a new, temporary Ontario Staycation Tax Credit for the 2022 tax year. This Personal Income Tax (PIT) credit would provide Ontario residents with support of 20 per cent of eligible 2022 accommodation expenses of up to $1,000 for an individual and $2,000 for a family, for a maximum credit of $200 or $400, respectively.
Ontario residents could apply for this refundable credit when they file their 2022 PIT returns and benefit even if they do not owe any PIT. An eligible accommodation expense would have to be:
- For a stay of less than a month at an eligible accommodation such as a hotel, motel, resort, lodge, bed-and-breakfast establishment, cottage or campground in Ontario;
- For a stay between January 1 and December 31 of 2022;
- Incurred for leisure (e.g., a non-business purpose);
- Paid by the Ontario tax filer, their spouse or common-law partner, or their eligible child, as set out on a detailed receipt;
- Not reimbursed to the tax filer, their spouse or common-law partner, or their eligible child, by any person, including by a friend or an employer; and
- Subject to Goods and Services Tax (GST)/Harmonized Sales Tax (HST), as set out on a detailed receipt.
Extending the Ontario Jobs Training Tax Credit
In the 2021 Budget, the government announced the temporary Ontario Jobs Training Tax Credit for the 2021 tax year. The government is proposing to extend this PIT credit by one year to 2022.
The parameters of this credit for 2022 would be the same as for 2021. This PIT credit would be refundable to support eligible individuals whether or not they owe PIT. The credit would be calculated as 50 per cent of eligible expenses for the year. The maximum credit would be $2,000 for the year.
Individuals would be able to claim the Ontario Jobs Training Tax Credit on their PIT returns for the year if they meet the following conditions:
- They are resident in Ontario on December 31 of the year; and
- They have a Canada training credit limit for the year that is greater than zero.
An individual can find their Canada training credit limit for a tax year on their latest notice of assessment or reassessment for the previous tax year, which is provided by the Canada Revenue Agency (CRA). To have a positive Canada training credit limit for 2022, an individual must have met income and other conditions set out in the federal Income Tax Act for at least one of 2019, 2020 or 2021. Furthermore, eligible claimants for the 2022 provincial tax credit would be at least 26 years old and not older than 65 at the end of 2022.
Eligible expenses would be the same as those that can be claimed for the Canada training credit. These include tuition and other fees paid to an eligible educational institution in Canada for courses taken in the tax year, or fees paid to certain bodies regarding an occupational, trade or professional examination taken in the year.
With this proposed extension, individuals could claim the Ontario Jobs Training Tax Credit on their 2021 and 2022 PIT returns.
Extending the Ontario Seniors’ Home Safety Tax Credit
In the 2020 Budget, the government announced the temporary Seniors’ Home Safety Tax Credit for the 2021 tax year. The government is proposing to extend this PIT credit by one year to 2022.
The parameters of this credit for 2022 would be the same as for 2021. This credit would be refundable to support eligible individuals whether or not they owe PIT. The credit would be claimed for eligible expenses by senior homeowners and renters or people who live with senior relatives.
Expenses would be eligible if they are paid or become payable in 2022 and would be for renovations that improve safety and accessibility or help a senior be more functional or mobile at home. Eligible expenses would include:
- Renovations to permit a first-floor occupancy or secondary suite for a senior;
- Grab bars and related reinforcements around the toilet, tub and shower;
- Wheelchair ramps, stair/wheelchair lifts and elevators;
- Non-slip flooring;
- Additional light fixtures throughout the home and at exterior entrances;
- Automatic garage door openers; and
- Modular or removable versions of a permanent fixture, such as modular ramps and non-fixed bath lifts.
Additional information about eligibility is set out in legislation.
The Seniors’ Home Safety Tax Credit would be worth 25 per cent of up to $10,000 in eligible expenses for a senior’s principal residence in Ontario in the year. The maximum credit would be $2,500 for the year. As in 2021, the annual $10,000 maximum per household could be shared by the people who live together, including spouses and common-law partners.
Individuals would claim the credit for their expenses if improvements were made to their principal residence or to a residence that they reasonably expect to become their principal residence within the 24 months following the end of the year. Also, the credit could be claimed for an individual’s share of improvements done by a condominium corporation, or similar body, to property that includes the individual’s principal residence, provided the improvements meet the eligibility conditions.
If an improvement is paid for in instalments, all expenses for that improvement would be considered to have been paid when the final instalment becomes payable. The final instalment for the improvement would have to become payable in the 2022 tax year.
To claim the tax credit, seniors or their family members should save their receipts from vendors. Obtaining receipts from vendors would also help ensure that vendors report these amounts for tax purposes.
With this proposed extension, individuals could claim the Seniors’ Home Safety Tax Credit on their 2021 and 2022 PIT returns.
Fighting Financial Crimes and Tax Evasion
Ontario is proposing legislative amendments to the Business Corporations Act to introduce beneficial ownership information requirements as a measure to prevent and better detect the use of corporations for tax evasion, money laundering or other illicit financial activities. By proposing these beneficial ownership measures, Ontario would join most other Canadian jurisdictions.
The government is proposing that privately held business corporations would be required to collect and maintain beneficial ownership information and make it available upon request to law enforcement, tax authorities, and certain regulatory authorities including the Ontario Securities Commission, Financial Services Regulatory Authority of Ontario, and the Financial Transactions and Reports Analysis Centre of Canada. Corporations that offer securities to the public and their wholly owned subsidiaries would be exempt from the proposed information requirements. These amendments would be effective on January 1, 2023 to ensure businesses have the time to adjust to these new information requirements. The government will engage with stakeholders on the implementation of these measures to ensure they do not impose undue burden on business owners.
Individual with Significant Control
The proposed information requirements would apply to an individual, referred to as an “individual with significant control,” who:
- Owns, controls, or directs 25 per cent or more of the voting shares of the corporation or shares that are worth 25 per cent or more of the fair market value of all outstanding shares of the corporation; or
- Has direct or indirect influence over the corporation without owning at least 25 per cent of the shares.
A person would also be an individual with significant control if they own or control a significant number of shares jointly with other people. In addition, if a group of related persons collectively controls at least 25 per cent of the shares of a corporation, then each person would be an individual with significant control. A related person would include an individual and their spouse, son or daughter, or any other relative living in the same house.
Corporations would need to maintain the following information on each individual with significant control:
- Name, date of birth and address;
- Jurisdiction of residence for tax purposes;
- Date of becoming or no longer being an individual with significant control;
- A description of how the individual has significant control over the corporation, including a description of any interests and rights in shares of the corporation; and
- A description of the steps the corporation takes to keep this information current each year.
Updates would be needed at least once during each financial year of the corporation, and within 15 days of the corporation becoming aware of a change to any relevant information.
Property Tax Stability and Competitiveness
In 2019, the government announced a plan to conduct a review of Ontario’s property assessment and taxation system and seek input on opportunities to:
- Enhance the accuracy and stability of property assessments;
- Support a competitive business environment; and
- Strengthen the governance and accountability of the Municipal Property Assessment Corporation (MPAC).
The Ontario Ministry of Finance has been conducting consultation meetings and receiving input from municipalities, taxpayers, business and industry associations and other interested stakeholders. Municipal consultation has taken place through a range of forums, including an advisory committee comprised of representatives nominated by the Association of Municipalities of Ontario and the City of Toronto, as well as meetings with individual municipalities. Business engagement has taken place through meetings with business and industry associations and representatives of key sectors. As well, interested stakeholders have been encouraged to share feedback through written submissions and other targeted opportunities.
The government appreciates the constructive input and ideas that have been shared by municipalities, businesses, industry associations and other interested stakeholders throughout this review. While the government will continue to review the input that was received, it is acting now on some measures. They are summarized below under the three themes of the review.
Enhancing Assessment Accuracy and Stability
Providing Continued Stability
As announced in the March 2020 Economic and Fiscal Update and the 2021 Budget, the reassessments that were scheduled to be conducted for the 2021 and 2022 tax years were postponed. This provided much-needed stability and certainty to residents and businesses, and it enabled municipalities to focus on responding to the challenges posed by the COVID‑19 pandemic.
Input regarding the timing and valuation date for the next reassessment has been sought through the Property Assessment and Taxation Review. During these consultations, the government heard a wide range of views expressed by municipal and taxpayer representatives.
The government has considered the advice that was received and has concluded that the priority is maintaining stability for taxpayers and municipalities at this time. As such, property assessments for the 2022 and 2023 tax years will continue to be based on the same valuation date that was used for 2021.
The input that has been received during the review will help to inform decisions regarding future reassessments. The government remains open to receiving further advice related to property assessment accuracy and stability.
Enhancing Stability and Legislative Clarity
During the consultations, input was received on a number of broad issues related to the accuracy and stability of property assessments. Two key examples relate to the importance of productive and effective information exchange between MPAC and business property owners, and concerns about the potential impact of speculative sales activity. The government is examining possible approaches to respond to this input.
In addition to discussions related to broader property assessment issues, some advice was focused on specific property types.
Federal authorities operating airports in Ontario are required to make payments in lieu of property tax (PILT) to municipalities based on the number of passengers that travel through the airports annually. These airports include Billy Bishop Toronto City Airport, London International Airport, Ottawa International Airport, Toronto Pearson International Airport, and Thunder Bay International Airport.
The framework for this PILT has historically included a five per cent cap on annual increases. Municipalities have expressed concerns with this cap in relation to the impact of the COVID‑19 pandemic.
The COVID‑19 pandemic has resulted in an unprecedented decline in airline passenger traffic, which will significantly reduce the amount of PILT that airport authorities pay to their host municipalities. Both municipalities and airport authorities have acknowledged the concern that as passenger volumes recover, the five per cent cap would prevent PILT payments from increasing to reflect that recovery.
In response to input received during the consultations, the Province will temporarily suspend the five per cent cap until passenger volumes return to pre-pandemic levels for each airport. This will enable the PILT to grow in tandem with the recovery in passenger volumes, providing fairness to municipalities while maintaining longer term predictability for airport authorities. The government will continue to engage with stakeholders to consider their input on issues surrounding PILT.
Université de l’Ontario français
The government proposes to amend the Assessment Act to ensure that the new campus of the Université de l’Ontario français (UOF) is exempt from property tax. This approach would treat the UOF similarly to other universities and assist the institution in directing funds to priority initiatives that support students and academic programming.
Further Opportunities for Legislative Clarity
The Province is continuing to work closely with MPAC to ensure accuracy in property assessments and clarity in the property tax system. For example, the government proposes to amend the Assessment Act by simplifying the legislative requirements with respect to the assessment of pipeline properties, including the designation of pipelines by owners.
Supporting a Competitive Business Environment
Incenting Redevelopment of Brownfield Sites
The Brownfields Financial Tax Incentive Program (BFTIP) incents the redevelopment of unproductive contaminated lands by providing for the reduction of municipal and education property taxes on brownfield sites that undergo rehabilitation.
To increase the incentive provided under this program, the Province will extend the period for matching provincial education tax assistance from three to six years for business developments and 10 years for residential developments. In addition, the Province intends to streamline administrative processes for this program, particularly related to the timeliness of the review of applications.
These enhancements will also support the objectives of More Homes, More Choice: Ontario’s Housing Supply Action Plan.
Supporting On-Farm Businesses
During consultations with the farm sector and municipalities, opportunities were identified to enhance property tax programs that support farm businesses and encourage their expansion. Based on this feedback, the Province is proposing to move forward with a number of measures.
Currently, municipalities have the option of adopting a small-scale on-farm business subclass that provides a reduced tax rate on the first $50,000 of eligible assessment. The government is increasing this assessment threshold to $100,000 in order to support the establishment and expansion of on-farm value-added activities. While the Province will apply a reduced business education tax rate to this increased $100,000 threshold for all eligible properties, municipalities will have the option to maintain the current assessment threshold of $50,000 for municipal tax purposes.
In addition, the following measures will be introduced:
- Extend the farm property tax treatment that currently applies to the processing of maple sap to include all edible tree saps;
- Increase the current limit on the property tax exemption for farm woodlots from 20 to a proposed 30 acres to keep pace with the growth of farm sizes in Ontario; and
- Streamline and simplify application processes for the Farm Property Class Tax Rate Program.
Strengthening the Governance and Accountability of the Municipal Property Assessment Corporation
In support of continuous improvement and increased transparency, work is underway with MPAC to develop a comprehensive performance measurement framework. As part of this work, MPAC will publish an annual performance report beginning in 2022.
Improving MPAC’s Board Governance
MPAC is governed by a 13-member board of directors comprised of seven municipal representatives, four taxpayer representatives, and two provincial representatives. Current legislation limits the ability of this board to operate in the event of a single vacant position.
To support the effective functioning of the board, a legislative amendment is being introduced to ensure that a vacancy on the board does not impede the conduct of business by the corporation, provided that two-thirds of the board positions are filled (i.e., nine representatives) and the municipal representatives constitute a majority.
This change would support continuous, timely and effective decision-making by the board and bring it more in line with the approach for other agencies in Ontario.
Summary of Measures
Table A.1 reflects the cost of proposed tax measures in this document.
|Ontario Staycation Tax Credit||70||200||–|
|Ontario Jobs Training Tax Credit Extension||70||205||–|
|Ontario Seniors’ Home Safety Tax Credit Extension||10||25||–|
|Incenting Redevelopment of Brownfield Sites||–||2||3|
|Supporting On-Farm Businesses||s||s||s|
Table A.1 footnotes:
Notes: Numbers reflect the benefit to individuals, families, businesses, and other beneficiaries. Numbers also represent an increase in government expense or a decrease in government revenue. Numbers may not add due to rounding.
– = a nil amount.
s = a small amount (less than $1 million).
Source: Ontario Ministry of Finance.
Amendments will be proposed to various statutes administered by the Minister of Finance to improve administrative effectiveness or enforcement, maintain the integrity and equity of Ontario’s tax and revenue collections system, or enhance legislative clarity or regulatory flexibility to preserve policy intent.
Technical amendments are proposed to the Taxation Act, 2007 that would:
- Clarify that the Ontario Tax Reduction (OTR) and the Low-income Individuals and Families Tax (LIFT) credit are available on the final tax return of a deceased person.
- Ensure that the OTR, LIFT credit and certain refundable credits are not available for a bankrupt individual.
- Update the Ontario Child Benefit definition of “shared-custody parent” to parallel a recent change to the federal definition.
- Clarify the availability of the tax credit for unused tuition education tax credits.
An amendment to the Corporations Tax Act is proposed to clarify that the permanent establishment rule in subsection 4(12) does not apply to the Ontario premium tax liability of an insurance corporation licensed to sell insurance in Ontario. The proposed amendment would be deemed to have come into force on December 9, 2002.
An amendment to the Employer Health Tax Act is proposed to update the instalment thresholds related to interest and penalties from $600,000 to $1.2 million. This would follow a prior increase to other instalment thresholds.
An amendment to the Education Act is proposed to clarify that rates prescribed by the Minister of Finance for the calculation of payments in lieu of taxes reflect the tax rate that would apply if properties subject to payments in lieu of taxes were taxable.
An amendment to the Municipal Act, 2001 and to the City of Toronto Act, 2006 is proposed to clarify the Minister of Finance’s regulatory authority relating to the determination of relative tax burdens for business properties set by municipalities.